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Taking Care with Capital Allocation

Interpublic treasurer Ellen Johnson played a big role in the company’s efforts to regain investment-grade status.

Ellen Johnson, treasurer and senior vice president at the Interpublic Group of Companies, always keeps the end goal in sight.

Since her early 20s, when she left public accounting to begin a career in corporate finance, Johnson has methodically built up her resume. From the 24-year-old who didn’t yet have an M.B.A., but nonetheless talked Revlon Corp. into giving her the chance to work in financial planning and analysis, to stints as assistant treasurer, to her current position at Interpublic, Johnson has asked for and received more responsibility.

Two years ago, she added responsibility for corporate development, including M&A, to her treasury duties at Interpublic. Johnson hopes her career will eventually encompass the role of CFO and a board seat.

“I’ve really tried to continuously round out my background in finance,” she says. “Between the CPA, the M.B.A., FP&A, treasury, corporate finance and now corporate development, I just keep broadening my different skill sets.”

At Revlon, a high-yield company, Johnson first learned to be “thoughtful” about boosting liquidity without overburdening the balance sheet and to be aware of every penny and dime. Those lessons stay with her, she says.

“You have to make sure that you’re extremely thoughtful, that you’re using advisers to the best degree, and working through all the options before you come up with recommendations,” Johnson says.

The Revlon experience helped her navigate through some difficult times at Interpublic, a $7 billion marketing and advertising holding company in New York. Just after Johnson arrived in 2000, Interpublic restated its earnings and was a delinquent filer for a time, which damaged its credit ratings.

Johnson has helped the company regain investment-grade status at two out of the three major credit rating agencies, with the third, Standard & Poor’s, shifting to a positive slant on Interpublic about two months ago, citing the company’s improved profitability. Working with the rating agencies is “a lot about building relationships and building trust,” she says. “We try for continuous dialogue, so they’re never surprised.”

To accomplish the turnaround, Johnson made some bold decisions, including selling half of Interpublic’s stake in Facebook last year for $133 million and increasing the corporate credit facility to $1 billion, from $650 million, while extending it by five years.

“We also got our house in order,” Johnson says, “We put in place very good processes—accounting, internal control—and really just buttoned down our processes.”

Interpublic shared its progress with investors in the form of a $450 million share buyback program and a 6-cent dividend, the first Interpublic has paid since 2002.

Last year, Johnson oversaw 16 corporate deals, more than the company had done over the previous four years. She sees decisions about the company’s capital as the critical piece of her job.

“The greatest responsibility is making sure that we are being very thoughtful about the way we allocate capital,” she says, “making the right decisions about how much we give back to our shareholders, versus how much we invest, and in what. It’s making sure we get that mix, in the best possible manner, so we’re continuously increasing shareholder value.”

When it comes to her children—a nine-year-old and seven-year-old twins—she strives to make sure she never misses a game or recital, and she’s usually at the dinner table every night, even if that means working again afterward.

Just as there are opportunities at work that shouldn’t be missed, so there are in the home, Johnson says.

“Maintaining that quality of life and work balance is the greatest challenge every single day.” she says. “It’s about really pushing yourself to be as efficient as possible in every second that you spend your time, so that you allow yourself to remain involved and important. They grow up so fast, and if you’re not careful, you’re going to miss it.”

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